When it comes to car insurance, there are several types of coverage available. Liability, collision, personal injury protection, uninsured or underinsured motorists, comprehensive payments, and medical are the most common types of auto insurance coverage. In addition, some insurance companies offer supplemental insurance and rental reimbursement. To help you understand the different types of car insurance available, here is a comprehensive guide to the five main types of car insurance.
Liability Insuranceis the most basic type of car insurance and is required by law in most states.
It covers expenses for other people's property damage and medical bills after an accident you cause. Liability insurance has two components: bodily injury liability and property damage liability.
Collision Insurancecovers damage to your vehicle caused by an accident, regardless of who was at fault. It can be expensive and may not be necessary if the car is easily replaceable. However, if you have a more expensive car or one that's relatively new, collision insurance can help you get back to where you were before your car was damaged.
In most cases, this type of insurance is mandatory for leased or financed vehicles.